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Posts Tagged ‘Money’

What is Money?

Posted by Steve Markowitz on August 14, 2014

For some years conservative economists have voiced opinions that the easy money policies of the Federal Reserve and the increasing deficit spending by the United States will damage the economy. As the years pass and without clear connection between these policies and their costs or consequences, these calls have begun to sound more like the girl that cried wolf. However, unless one believes in perpetual motion or alchemy, there must be costs to policies that in essence print money.

Forbes Editor-in-Chief Steve Forbes has said of money:

Money is simply a tool that measures value, like a ruler measures length and a clock measures time. Just as changing the number of inches in a foot will not increase the building of houses or anything else, lowering the value of money will not create more wealth. The only way we will ever get a real recovery is through a return to trustworthy, sound money. And the best way to achieve that is with a gold standard: a dollar linked to gold.

While reasonable people can argue as to the merits of again linking the dollar to gold, it is hard to argue with Forbes’ common –sense definition of money being a measuring tool. Fiat currencies, those not tied to a commodity other than the printing press, are a promise that the currency will be worth something of value in the future for trade or commerce. It does not take a PhD in economics to realize that if the total amount of goods, services and demand remain constant while the money supply increases, that the value of money will decrease.

As a simplistic example, in an economy for which the only goods and services offered and that there is demand for is corn. In this example there are 100 bushels of corn produced each year and demand remains constant at 100 bushels annually. Finally, the total currency available to this society is $100. Under this scenario, the price of corn will be $100 divided by 100 bushels or one dollar bushel. If these assumptions remain unchanged, except the aggregate money supply increasing to $150, the price will increase to $1.50 per bushel, $150 divided by 100 bushels. This is an inflation rate of 50% for the year caused by the natural bid up of prices that will occur, the result of excess currency chasing limited supply.

So far the federal deficit and Fed’s easy money policies have not resulted in significant inflation. This is due to extraordinary economic events including: 1) outsourcing that has lowered the cost of labor to the developed world, 2) excessive production capacity due to significant increases, mainly in China, and 3) historically low cost of financing that has offset spending increases by the government and lowered various costs to private industry. However, none of these items are sustainable, which when the tide turns, has the potential to lead to significant inflation with little warning.

Few economists are currently predicting significant inflation in the near-term. However, significant economic changes are rarely predicted in advance by mainstream economists. We need look no further than their track record of not predicting the 2008 economic meltdown or the problems that the subprime mortgage market would cause the economy.

Bubbles and other non-sustainable economic events generally continue much longer than reasonable logic predicts. This reality leads to a hockey stick type trajectory towards the end of bubbles. Therefore, the best economists can do is to predict a low rate of inflation until inflation kicks in. Yikes and hold on!

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Posted in economics, Inflation | Tagged: , , , , , | 6 Comments »

Fed Policies Hindering Economy

Posted by Steve Markowitz on June 6, 2013

Since the 2008 financial crisis the Federal Reserve (Fed) and central banks worldwide have been on a grand experiment.  They pushed interest rates to near zero and have been printing money at historic levels, sometimes referred to as Quantitative Easing.  When these efforts were first employed they were justified with the theory that without them the world was heading towards economic Armageddon.  That claim will never be proved, but there is no doubt the financial markets froze up and required action.

We are now five years past the height of the financial crisis and Fed policies remain unchanged.  We also now have the benefit of history that indicates the policies have not cured the economic malady facing United States and much of the world.

David Malpass, an assistant Treasury Secretary during the Reagan Administration, published an op-ed in the Wall Street Journal titled “Fed Policy is a Drag on Recovery” proffering the view that the Fed’s low-interest policies have hindered economic growth and recovery.  Malpass’s op-ed includes (emphasis added):

As this month’s stock and bond market gyrations showed, traders are obsessively focused on every nuance of the Fed’s monetary plans.  Billions of dollars are at stake for Wall Street, which profits mightily from the Fed’s bond buying and cheap credit.”

Recoveries are normally fast and broad once markets are allowed to clear and begin operating.  Quarterly growth topped 9% in 1983 after a deep recession and 7% in 1996 leading into President Clinton’s re-election.  Interest rates were high, yet median incomes were rising sharply.”

Growth in the current recovery only rose above 4% once, in the fourth quarter of 2011, and averaged just 2% per year in its first four years versus 5% in the same period of the 1980s recovery, 3.2% in the 1990s recovery and 2.9% in the 2000s recovery.  The underperformance over the past four years translates into more than three million jobs that should have been created but weren’t, an economic disaster that lowered real median incomes by 5%.”  In addition, “Private-sector credit grew only 0.8% from the end of 2008 through the end of 2012, whereas credit to the government grew 58%.”

Tax-and-spend policies sapped investment, and the Fed’s low rates and bond purchases damaged markets, hurt savers and channeled credit to the government at the expense of job creators.  It’s a zero-sum process that should be stopped because of the bad effect on growth and jobs.”

“Incredibly, as Fed Chairman Ben Bernanke alluded to in his May 22 congressional testimony, the Fed is now angling to create a semi-permanent control dial with which the Fed can increase its $85 billion in monthly bond purchases when growth slows and reduce them if growth ever speeds up.  This creates maximum uncertainty for the private sector, giving an advantage to traders, the government and the rich but hurting growth and long-term investors.

“This trickle-down monetary policy has contributed to very fast growth in corporate profits, part of the explanation for the record stock market, but also to weak GDP growth and declining middle-class incomes.  The extra credit the Fed channeled to government and big corporations meant less credit elsewhere in the economy, a contractionary influence since most new jobs come from small businesses.”

Finally, Malpass quotes retired Federal Reserve Chairman Paul Volcker who recently said that the Fed should not “accommodate misguided fiscal policies” and that such policies “will inevitably fall short.”  Volker also said of the Fed that “credibility is an enormous asset” that ”once earned, it must not be frittered away.”  Given the failure of the Fed’s accommodating policies its credibility has been severely damaged.

President Obama was recently praised by retired Secretary of State Colin Powell for his handling of the economy based on the stock market’s high valuation and the improving unemployment rate.  The lofty stock market valuation in a slow-growing economy is a negative sign of a bubble.  As for the employment rate, the chart below shows that it is now at a 30 year low.  Decades of government intervention, along with the current Administration’s and Fed’s failed policies, are the cause and need to be dismantled.

EMployment History

Posted in economy, Federal Reserve | Tagged: , , , , , , | Leave a Comment »

Apple Takes On Debt, Showing Fallacy of Government Policies

Posted by Steve Markowitz on April 28, 2013

The Wall Street Journal reported that Apple announced plans to borrow money for the first time in its history.  This raises the question as to why a company that currently has $145 billion in cash is seeking to raise money through debt.  The answer is simple, bad government economic policies.

Apple is raising funds through the issuance of debt because it can currently do so very cheaply.  With interest rates at historically low levels due to governmental and the Federal Reserve’s interventions, Apple joins other cash-rich companies issuing debt.  While the government’s and Fed’s low-interest rate policies are designed to stimulate bank loans, most of the loans are either occurring in the form of banks purchasing Treasury securities or making loans to companies who do not need funds.  As a result, the low interest rate policies are not stimulating the economy as designed, but are instead creating imbalances (bubbles) within the economy.

In addition, a significant portion of Apple’s cash is currently located in subsidiaries outside the United States.  With the United States having one of the highest corporate tax rates in the world, Apple would pay a huge penalty if it were bring these funds back to the states to pay future shareholder dividends that have been promised.

You cannot make this stuff up!

Posted in Government Ineptness | Tagged: , , , , , | Leave a Comment »

Obama’s Pay to Play Politics Drawing Fire From the Left

Posted by Steve Markowitz on March 5, 2013

In a sign that even some on the Left are tiring of the President’s sleazy politics, the New York Times has joined others in criticizing Obama’s willingness to sell access to the White.  Late last month in article titled Obama’s Backers Seek Big Donors to Press Agenda the Times reported on the President’s election organization, Obama for America, morphing into an organization called Organization for Action (OFA) with the goal of raising $50 million to advocate Administration policies.  The Times said of this scheme that it has “ample potential for influence-peddling, and no real precedent in national politics”.

OFA will act as a super PAC, the type of political organization so often attacked by Obama in the past.  It plans to raise over half of its funds through deep-pocketed donors.  Since OFA is set up as a tax-exempt “social welfare group”, it will be exempt from federal regulations including contribution limits and those that bar the White House from soliciting contributions.

This month OFA will hold its “founders summit” where donors who pay $50,000 will meet with former Obama campaign manager Jim Messina and ex-White House official Carson.  However, the holy grail for access is made for donors giving $500,000 or more who will then be placed on an Obama advisory board that will meet quarterly with the President.  Deep-pocketed individuals and corporations will thus gain power and influence by donating to the President’s cause.  Common cause Pres. Bob Egger set of this arrangement: “It just smells.  The President is setting a very bad model setting up this organization.

In a later editorial titled The White House Joins the Cash Grab, the New York Times when even further stating:

 “And now that this White House has torn down the last wall between its needs and those of special interests, others in the future will undoubtedly do the same.”

“…  at least half of which will come from donors pressured to bring in $500,000 or more.  Give or raise that much and you get to be on the group’s ‘national advisory board,’ which will hold quarterly meetings with the president.  That is nothing more than a fancy way of setting a price for access to Mr. Obama.”

“When conservative groups first began using social welfare groups as vehicles for fund-raising and advocacy, Mr. Obama denounced the practice.  ‘You can’t stand by and let the special interests drown out the voices of the American people,’ he said in 2010.  A year later, though, he allowed his supporters to set up a “super PAC” called Priorities USA Action, and the new group is built on the same defeatist philosophy ‘if you can’t beat them, join them’.”

“If Organizing for Action wants to restore the bracing political spirit that carried Mr. Obama into office in 2008, it can refuse all corporate contributions and limit donations to a few hundred dollars.  Otherwise, it will be playing the same sleazy game that its opponents do, made even worse by the assent of the president.”

As this Blog has proffered in the past, Barack Obama has much in common with Richard Nixon.  Both had problems with the truth.  Both placed their own personal gain above the good of the Country.

 

Posted in Politics, President Obama | Tagged: , , , , , , , , | Leave a Comment »

Obama’s Second Inaugural Bash Funded by Special Interests

Posted by Steve Markowitz on January 26, 2013

Barack Obama’s first presidential election victory was propelled by the infamous saying “hope and change”.  Behind this phrase was Obama’s implied and stated promise to bring change to the sleaze in Washington and the way it does business.  Four years later this has proved to be a hollow promise.

imagesFour years ago for his first inauguration celebration, Obama promised and funded it with small donations and without any corporate or special-interest lobbying money.  Four years later the second party was funded by the sleaze in Washington he promised to eliminate.  This week’s inaugural galas were paid for by million dollar plus donations.  As the washingtonguardian.com reported, the special-interest groups that put cash in a pot included:

Telecom powerhouse AT&T – Now before you Progressives get the idea that AT&T has seen the Leftist light take note that they are lobbying the Federal Communications Commission for increased spectrum versus smaller carriers and spent over $14 million in 2012 lobbying the government.  Sure, mere coincidence.

Big labor unions – Various large unions including the American Postal Workers Union, the Laborers International Union, the American Federation of Government Employees, the International Association of Fire Fighters, the International Brotherhood of Electrical Workers, and the International Union of Painters and Allied Trades put cash into the pot.  Just a magnanimous gesture from working Americans’ dues?  Not likely.  Last year the President stuffed the National Labor Relations Board (NLRB) with union buddies.  Coincidentally, earlier this week an appellate ruled Obama’s recess appointments to the NLRB unconstitutional.

As for the President’s promised transparency during his first run for the White House, that too is gone.  The Presidential Inaugural Committee indicated it will not release the names of the big donors to the inaugural bashes for three months.  However, washingtonguardian.com reported that one big donor was Steve Ricchetti whose lobby clients have included AT&T, Eli Lilly and GM.

Yes, we are back to sleazy business in Washington, but with one difference.  No longer do we have an independent press willing to report on Washingtonian malfeasance.

Posted in President Obama | Tagged: , , , , , , , , | Leave a Comment »

The Paradox of Bailouts

Posted by Steve Markowitz on January 7, 2012

Since the failure of Lehman Brothers, governments worldwide have responded with bailouts and flooding the market with liquidity, i.e. printing money.  These radical actions have been justified with the claim that without them, financial Armageddon would have occurred.  It is not possible to now determine if that was the case.  However, it is clear that these actions enabled those who made bad financial decisions to be rescued at the expense of others who acted more prudently.

Unsaid by those who favored the bailouts and other related policies were the potential repercussions of these radical actions.  Some of the repercussions have already been felt, most notably the ongoing sovereign debt issues in Europe and the unemployment rates in the West that remain stubbornly high.  Other lurking issues include new asset bubbles yet the pop and the potential for significant inflation.  Whether each of these possibilities occur is not the issue.  However, there will be costs associated with the alchemy inflicted on the economy by these actions.  The fact that those who implemented the policies refuse to even acknowledge the downside potentials and instead advocate even more intervention is a clear indication of the dangers lurking.

Recently, Dr. John P Hussman of hussman funds.com, posted his New Year’s greeting with his hope for 2012, included below.  These brief comments asked the right questions and points appropriate solutions for the paradox of bailouts.

John P. Hussman, Ph.D. (hussmanfunds.com)

Happy New Year.  We enter 2012 with a great deal of hope, but our hopes are not for more bailouts, or money printing, or any of the myriad policies that investors seem to hope will save bad investments and sustain elevated valuations.  Instead, our hope is that in 2012, the market will finally “clear,” in the sense that bad debt around the world will be recognized as bad and restructured; that overleveraged financials will be taken into receivership instead of forcing austerity on every corner of the global economy in order to make them flush again; that rates of return will rise enough to compensate and encourage saving – and high enough to encourage borrowers and other users of capital to allocate the funds productively.  Of course, in order to restructure bad debt, someone has to accept a loss.  In order for rates of return to rise, valuations must decline.  In short, our hope is for events that will unchain the global economy from an irresponsible past and open the gates toward a prosperous future.  Maybe that is too hopeful, but we are not entirely convinced that bailouts and ‘big bazooka’ will be as easily procured in the year ahead as a confused public has allowed in recent years.”

Posted in Bailouts, economics | Tagged: , , , | 2 Comments »

Quantitative Easing Explained

Posted by Steve Markowitz on February 14, 2011

This Blog has posted various articles discussing the Federal Reserve’s (Fed’s) use of “Quantitative Easing” in an effort to stimulate the economy.  While the first $2 tril. effort failed to stimulate anything, the Fed is currently embarking in a second round referred to as “QE2” for an additional $600 bil.

Quantitative Easing is an exotic term used to refer to a relatively simple concept; the government printing money.  However, inside this printing process are many complexities.  Following is a video forwarded to this Blog today that offers and tong in check approach to explaining Quantitative Easing. It offers a bit of levity to a serious issue that should be of concern all Americans.  Printing money has throughout history resulted in serious consequences to countries that have tried it.  There is no such thing as a free lunch or perpetual motion.

 

Posted in Uncategorized | Tagged: , , , | Leave a Comment »

Fed’s Cheap Money and Unintended Consequences

Posted by Steve Markowitz on December 14, 2010

Bloomberg published a report that once again shows the unintended consequences of governmental meddling into the economy.  Phoenix-based mining company, Southern Copper, announced that it plans to invest $800 million in various projects including a new smelter and natural-gas furnace.  Such capital equipment investments are what the government and Federal Reserve were promoting through its low interest rates policies and printing dollars.  Southern Copper took advantage of these policies raising $1.5 billion in debt this year.  However, much of those funds will be invested in Mexican and Peruvian mines.

The laws of supply and demand will not be circumvented by government policies.  According to Bloomberg, a significant portion of the debt being raised in the United States is being invested in emerging markets, not the U.S.  While U.S. corporations raised about $1.0 trillion in debt in 2010, foreign companies also raised about $600, a significant increase over the previous year.

The Federal Reserve Bank’s Dallas president, Richard Fisher has said: “I have begun to wonder if the monetary accommodation we have already engineered might even be working in the wrong places.”  Such disruptions, Mr. Fisher, are guaranteed when the government attempts to manipulate the economy.

 

Posted in economics, Federal Reserve | Tagged: , , , , , , , | 1 Comment »

Mexico’s Violence Can No Longer be Ignored

Posted by Steve Markowitz on July 26, 2010

While the Obama Administration wastes taxpayer money fighting Arizona for its attempt to secure its border with Mexican, the President ignores the serious problems on our southern border.

Violence and corruption is not new to Mexico.  However, it has escalated to a level that we can no longer ignore.  The Associated Press reported that drug traffickers used a car bomb for the first time, killing a police officer and two others with high-tech explosives.  They seem to be learning from other terrorists groups.

Last week Mexican authorities discovered 51 bodies in a trash dump near the northern city of Monterrey, blaming it on drug gangs.  This follows a similar finding in the city of Taxco a few weeks ago when 55 bodies were stuffed into a mine, again drug gang related.  These are but examples of the violence that has claimed some 25,000 lives in Mexico’s drug war since 2006.

Mexico’s violence and corruption points to the possibility that it will become a failed state.  It is no wonder that so many people want to leave that country.  As sad as this is for the innocents, this situation is dangerous for the United States and demands that we secure our borders.  Without proactive action the growing violence will spill over to the U.S. side of the border.

We must also consider other proactive steps to resolve the problems at our southern border.  Progressives blame America’s liberal gun laws for the violence, which is a simplistic and unrealistic explanation.  Even if Americans stop selling guns to Mexicans it would not stop the gangs from obtaining them.  The world is awash with guns and Mexican drug-lords have all the money required to buy them from many sources.

No, the problem is as it typically is; money and greed.  As long as the drug-lords can reap huge profits from selling drugs the violence will escalate.  It is the profit potential that America has culpability in for Mexico’s problems.  Our country must do its part to stamp out the profit for dealing in the drugs.  That leaves us with two alternatives:

1. Continue with drugs being illegal and use laws and interdiction in an effort to stop the sale of drugs; or

2. Legalize drugs, lowering their price to the point where gangs cannot profit from the trade.

Given the billions that America has spent over decades on the first approach, its failure proves it not to be viable solution. A free society is unwilling to give law enforcement the “rules” required to tackle such a widespread problem.

That leaves us with the second option.  Many on the Right go ballistic at the thought of legalizing drugs and base their outrage on moral grounds.  This Ostrich approach ignores reality.  Making drugs illegal does little to limit availability.  Drugs are readily available to all Americans, even our younger children.  The billions wasted annually attempting to enforce drug laws can be better spent on education, rehabilitation and relating tasks.

Americans bare some responsible for the growing violence in Mexico due to the drug trade.  Should Mexico fall into anarchy, we will pay an even steeper price than we currently are.  It is not our guns that have brought power to the Mexican drug gangs; it is our money.  Only by stopping the flow of money to these gangs can the problem be addressed and our border made secure.

Posted in Illegal Alliens, Mexico | Tagged: , , , , , , , , , , , | 2 Comments »

Baby Boomers – The Generation of Narcissists

Posted by Steve Markowitz on May 3, 2010

Tom Brokaw wrote a book titled The Greatest Generation referring to the exploits of the generation that survived the Great Depression, won World War II, and gave their children a country with many financially assets and few liabilities.  They also raised the generation of what became known as the Baby Boomers, of which I am a member.  Boy, have we blown it!  Historians will write volumes as to how the Boomers squandered their parent’s legacy.

Below is another Boomer’s take on our generation.  Written some time ago by Jim Mahoney who has been a guest author on this Blog, it offers great insight on how we traveled down the wrong path.  It was written in response to an op-ed in our local newspaper by one of those narcissistic Boomers spouting Progressive dribble.  I have posted the dribble after Jim’s response for any who feel the need to read it.

Hopefully our children will learn from our mistakes.  They could start by reading Jim’s editorial.

The Baby Boomers, By Jim Mahoney

In a recent Another View column, David Vaida lamented the current state of voter apathy and lack of volunteerism.  Using the lyrics of Cream as a backdrop, his solution was to bring back the activism of the 1960s.  As a Baby Boomer myself I feel that this is the wrong approach since many of the problems we are experiencing today can be directly traced back to the 60s revolution.

We Baby Boomers were the product of our parents’ well meaning intentions.  Having lived through the Great Depression and World War II, their greatest hope was to give us lives free from the struggles they had faced.  The majority of 60s radicals came not from poverty, but from a level of middle class privilege provided by their parents’ hard work.  We recklessly decided to reject everything about our parents’ generation without ever thinking they had something to teach us.  Almost overnight, the Greatest Generation’s culture of optimism was replaced by the Boomer’s culture of cynicism.  Let’s take another musical journey to examine the lasting impression the Baby Boomer generation has made on our society.

Our first selection is Pink Floyd’s “Money”.  Baby Boomers saw the standard of living our parents spent a lifetime to achieve and decided we wanted the same thing without having to wait until we could afford it.  Boomers used credit to acquire more and more possessions and racked up unprecedented levels of personal debt.  To support our lavish lifestyles we have saved virtually nothing for our retirement, leaving a future burden for our children.  The 60s radicals who rejected the materialism of their parents ended up becoming the most materialistic generation in history.  Even an idealist like Mr. Vaida admits spending more for 2 concert tickets to the Cream reunion than I paid for my first car.

Our next hit comes from Crosby, Stills and Nash with “Teach Your Children”.  Perhaps the biggest failure of the Baby Boomer generation is what we have done to our children.  Ignoring thousands of years of accumulated parenting knowledge, we became the first generation of parents who wanted to be friends to our children instead of providing them with moral authority and boundaries of behavior.  In the mistaken belief that giving children everything they want is synonymous with giving them everything they need; we have created a self indulgent generation of young people with an overdeveloped sense of entitlement and little concern for anything beyond their immediate needs.

The Boomers’ contribution to education brings to mind Alice Cooper’s “School’s Out”.  As Baby Boomers moved into positions of authority in our public schools and universities we decided that the basic curriculum was no longer relevant and threw out the traditional methods of teaching.  Our schools now teach students about everything America did wrong while emphasizing none of the things that made us great.  Every student knows that Thomas Jefferson owned slaves, but none of them have learned about the brilliance of the Constitution our founding fathers created.  Students receive little or no basic education in History, Civics or Economics.  They have no historical context of what it means to be an American.  If anything they have learned that Americans have no reason to be proud of anything about ourselves.

The Boomers promoted the idea of moral relativism with no absolutes of right and wrong, only differences of opinion.  Anything that pokes a finger in the eye of American culture is celebrated while values-based organizations like the Boy Scouts are vilified.  Our movies and television programs glorify the most negative aspects of our society and thanks to a Baby Boomer ex president; our young people now believe that oral sex isn’t really sex.

The Baby Boomers, one of the most self absorbed generations in history, have raised a generation of self absorbed children with little sense of history, civic responsibility or duty to others. Why is Mr. Vaida surprised that they aren’t voting or volunteering for non profit organizations?  The problems of this country cannot be simplistically solved by the wisdom contained in Cream lyrics or some gassy counterculture rhetoric.  I think The Eagles best express my advice to Mr. Vaida and other Baby Boomers who wistfully long for the resurrection of radical 60s activism – “Get over it.”

How nostalgia can foster passion and citizenship, by David Vaida

Nostalgia is my least favorite emotion. I think it’s because I have absorbed the American idea of always looking forward. As a child, my father told me that the good old days are right now, so I grew up in a household where the past barely existed. George Santayana’s dictum that ”those who cannot learn from history are doomed to repeat it” was an irrelevant saying by a vaguely known philosopher.

Until last week, I experienced nostalgia only once in my half century of life on this planet. It was Jan. 13, 1993, the day after Cream was inducted into the Rock and Roll Hall of Fame. I was on the New Jersey Turnpike to see my in-laws when a 1968 bootleg version of Jimi Hendrix playing ”Sunshine of Your Love” at San Francisco’s Winterland came on the radio. For some reason, hearing Hendrix brought over me that terrible feeling that ultimately engulfed an entire generation — the loss of innocence.

It is true that the 1960s were doomed to failure if success was to be measured by total social revolution. It is also true that icons of the youth movement — John F. Kennedy, Bobby Kennedy and Martin Luther King Jr. — were murdered, showing anyone who doubted it at the time that resistance to change would be violent. But the changes that ultimately came were breathtaking and have become part of the culture we live in today. The liberation of women, gays and minorities was based on equal treatment under the law, and this political argument was carried on by those politically involved.

By 1970, however, the Summer of Love had been replaced by the Summer of Rage, Altamont followed Woodstock, and peaceful change by violent protests. While disillusionment was understandable, it led to the political crisis we are in, where interest groups and zealots maneuver democracy because the electorate can’t be bothered to vote.

It is bad enough that in a hotly contested presidential race we can barely get 60 percent of voters to the polls, but what are we to make of what happens in local elections? Primaries, the key event to put forward new candidates, in Lehigh and Northampton counties average 15 percent of the registered voters. When we finally get to a head-to-head contest, if 40 percent of all eligible voters come out it is seen as stupendous.

The same problem exists with membership in civic organizations. Boards of non-profits are constantly looking for new members. Fundraising is a struggle and, even though charitable giving is up, there is a malaise in the entire system shown by the fact that a small group of people does all the work.

This public expression of a private desire to be left alone must be turned around; otherwise, others will run our lives and make decisions we will come to profoundly regret, as can be seen with the war in Iraq. We must go back to the days of activism, marches, protests and every other lawful engagement with our government to make change. It is a time for the ’60s generation to give another listen to the old Cream albums and recapture the energy that made them bold.

I finally did get to see Cream the last day of their reunion gig at Madison Square Garden on Oct. 26. It was a chance to experience the original supergroup — the fountainhead of a rock sound that dominated for almost 15 years. I took my 25-year-old son, who graciously agreed to come and share my enthusiasm for what I described to him as a once-in-a-lifetime event. I must confess that the average age at the concert was at least 50 and the snide remark by some critics that this was ”geezer rock” is not entirely unfounded. But what a show.

Just seeing Eric Clapton, Jack Bruce and Ginger Baker alive together was moving. Then, being regaled with two hours of electric blues, a musical form I predict will one day come back because, unlike rap and hip-hop it has the power to last, was like dipping into the fountain of youth. It was all there by a band that only lasted from 1966 to 1968: ”White Room,” ”Crossroads,” ”Badge” and the other great cuts.

For some reason, ”Strange Brew” was left out, but ”Tales of Brave Ulysses” alone was worth the price of admission, which, incidentally, was so high that American Express sent me an e-mail asking if someone had stolen my credit card.

It was a great and memorable evening. As I left with my son, who still says he wants to be a lawyer, enter politics and repair the world, all I could do was hum the one song Cream didn’t play but captured the spirit of their time — ”I Feel Free.”

Posted in Baby Boomers, Progressives, Radical Left | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , | 17 Comments »